Infection with hepatitis B virus is a major cause of liver disease worldwide and accounts for 5-10 per cent of chronic liver disease and cirrhosis in the United States. Safe and effective vaccines are now available for prevention of hepatitis B. However, therapies for the disease once it has occurred are unsatisfactory. Alpha interferon was the first antiviral agent shown to be effective in this disease and was licensed for this indication in the United States in 1993. The basis for licensure were, in part, studies conducted in the Liver Diseases Section of NIH. However, alpha interferon is effective in only one-third of patients with typical chronic hepatitis B and its role in atypical forms of this disease remain unclear. Current activities in the Liver Diseases Section are focused on developing better therapies to prevent long-term consequences. A longterm study of lamivudine (3-thiacytidine) for both HBeAg positive and anti-HBe positive chronic hepatitis B has been underway since 1996. Virtually all patients with chronic hepatitis B have had a serum biochemical, virological and histological response to lamivudine in a dose of 100 mg once daily. However, breakthrough with viral resistance has occurred in 75% of patients who were initially HBeAg positive but in only 10% of those initially anti-HBe positive (and HBeAg negative). Liver biopsies taken after 3 to 5 years of therapy show marked improvements in all patients who maintained a virological response, but no improvement or worsening in those with viral resistance. Some patients with a maintained response have cleared all markers of infection (HBeAg, HBsAg and HBV DNA). Others remain HBsAg positive but have normal liver biopsies. Indeed, some biopsies show resolution of previous fibrosis. A central issue is how to manage patients who develop lamivudine resistance. Patients with resistance demonstrating progression of disease will be treated with alpha interferon in an attempt to induce a longterm remission. Patients who fail to respond to this approach or who have mild disease despite resistance will be enrolled in future trials of new antivirals (adefovir) alone or in combination with lamivudine. Patients who have had a long term response to antiviral therapy will be evaluated for whether the virus is merely suppressed and is still present in low level or is eradication and no longer detectable even in liver. Immune responses to hepatitis antigens will be compared between long term responders and non responders to attempt to dissect out the immunology and virologic determinants of recovery from hepatitis B.